Hong Kong requires crypto exchanges to provide user TXs data to tax authorities

[noorman0]

While Hong Kong may have previously served as a "shield" for one's identity against tax authorities in one's home country, that will no longer be the case by 2028.
A new law has just been enacted.

Hong Kong passes law requiring crypto exchanges to report customer transactions to tax authorities
Crypto firms must collect customer and transaction data from 2027, with Hong Kong sharing the information with overseas tax authorities from 2028.

--snip--
Crypto exchanges and brokers covered by the rules will have to record customers' names, addresses, tax residency, and identification numbers, along with records of crypto purchases, sales, and transfers.

That includes buying and selling cryptocurrencies, swapping one token for another and sending funds to external wallets. The Inland Revenue Department will share customer details and annual transaction totals with tax authorities in participating jurisdictions where those customers are tax residents.

Source

In any event, I still find it hard to believe that, to this day, Hong Kong imposes a 0% tax on capital gains.

[Faisal2202]

Haha, I had no idea that Hong Kong had zero tax on gains, but now that I do, they are going to use the CARF framework to report our earnings back to our own tax authorities, where they can tax our gains. Haha, I guess I wasted the opportunity, but wait! We also had no taxation here as well. Haha, they will impose it in 2027, though.

Anyway, Hong Kong is no longer a tax shelter. Now, what remains on the list? Can we name them out loud even? Haha. Well, the UAE is one I know of.

[Aliciaworld]

While Hong Kong may have previously served as a "shield" for one's identity against tax authorities in one's home country, that will no longer be the case by 2028.
A new law has just been enacted.

Hong Kong passes law requiring crypto exchanges to report customer transactions to tax authorities
Crypto firms must collect customer and transaction data from 2027, with Hong Kong sharing the information with overseas tax authorities from 2028.

--snip--
Crypto exchanges and brokers covered by the rules will have to record customers' names, addresses, tax residency, and identification numbers, along with records of crypto purchases, sales, and transfers.

That includes buying and selling cryptocurrencies, swapping one token for another and sending funds to external wallets. The Inland Revenue Department will share customer details and annual transaction totals with tax authorities in participating jurisdictions where those customers are tax residents.

Source

In any event, I still find it hard to believe that, to this day, Hong Kong imposes a 0% tax on capital gains.

If Hong Kong has a 0% capital gains tax policy, them why exactly do they needs exchanges to hand over TXN data? Is it simply for overseas tax authorities? Why?

Please someone explain

[noorman0]

If Hong Kong has a 0% capital gains tax policy, them why exactly do they needs exchanges to hand over TXN data? Is it simply for overseas tax authorities? Why?

Please someone explain

If you read the article, specifically this part:

"The law adopts the Organization for Economic Co-operation and Development's (OECD) Crypto-Asset Reporting Framework (CARF), released in October 2022 and designed to help governments identify crypto transactions that may otherwise go unreported for tax purposes."

Hong Kong is part of the OECD, where its approach is clearly aligned with supporting the organization's vision: Transparency and Exchange of Information for Tax Purposes.

[Charles-Tim]

In any event, I still find it hard to believe that, to this day, Hong Kong imposes a 0% tax on capital gains.

Crypto trading businesses are taxed according to the content on the link that you posted. But individuals are not taxed.

This is good, but you know what the government can do at anytime. There is still possibility that the government can one day announced that crypto will be taxed.

[YOSHIE]

Hong Kong requires crypto exchanges to provide user TXs data to tax authorities

This is indeed the government's way of controlling crypto, because they cannot regulate and control crypto assets directly, of course they will apply the rules and laws of the Crypto-Asset framework, I assess the legal policies/legislation that apply to crypto transactions in Hong Kong. I assess that this situation will certainly pose a risk for crypto users themselves.

The impact of the laws enacted in Hong Kong for crypto users.
One of them is the convenience where so far crypto exchange users are free from supervision, When these rules apply, strict supervision of external wallets will occur, users will no longer be comfortable when carrying out transactions on crypto exchanges starting from sending crypto assets, buying and selling, Of course, this situation will eliminate the anonymity of the original transfer that should occur with crypto assets on exchanges, wallets and so on.

Not to mention the risks posed by the Hong Kong authorities regarding delayed tax bills, fines and so on including audit examinations, I personally think that this law will also eliminate the original privacy nature of crypto asset transactions themselves.

[Don Pedro Dinero]

Another one to add to the list. There was a time when people in Dubai could go and deposit or spend their cryptocurrencies without being asked too many questions about where they came from, but that changed a few years ago. The fact that Hong Kong is set to join the scheme marks a further step towards the aim of exercising total control over financial transactions worldwide.

[Z-tight]

If Hong Kong has a 0% capital gains tax policy, them why exactly do they needs exchanges to hand over TXN data? Is it simply for overseas tax authorities? Why?

Please someone explain

So that they can share the information with authorities from other countries, that are also part of the OECD CARF. The existing tax law in Hong Kong doesn't change with this new law, what changes is that crypto users would no longer be able to evade taxation using CASP's in Hong Kong.

The goal of this organization is to fight tax evasion and of course exercise control of people's financial activities, irrespective of  jurisdiction.

[BABY SHOES]

Until looking for several lists of crypto exchanges in Hong Kong, there are many... one of them is OSL which has acquired local exchanges in our country.
[1] https://fintechnews.hk/licensed-crypto-exchanges-hong-kong/
In the beginning, we thought that Hong Kong did not have many exchanges.

Haha, I had no idea that Hong Kong had zero tax on gains, but now that I do, they are going to use the CARF framework to report our earnings back to our own tax authorities, where they can tax our gains. Haha, I guess I wasted the opportunity, but wait! We also had no taxation here as well. Haha, they will impose it in 2027, though.

Not strange... The government has everything to regulate this, especially now that rumors of money laundering have been reported even under sanctions, other countries will react to watch more closely.

Hong Kong users still have one more year before the tax is implemented in 2028... our government has done it before. Lol

[Z-tight]

Hong Kong users still have one more year before the tax is implemented in 2028... our government has done it before. Lol

There is no new crypto tax law in Hong Kong. As a matter of fact, crypto people who are tax residents in Hong Kong are not affected by this new law, they still get to pay no capital gains tax on their coins.

However, this law is for tax residents of other countries who use HK to evade crypto tax. Now the authorities in HK would share these data with overseas government, so the can tax their residents according. It is all about collaborating to combat tax evasion, under OECD CARF.

[Faisal2202]

Not strange... The government has everything to regulate this, especially now that rumors of money laundering have been reported even under sanctions, other countries will react to watch more closely.

Hong Kong users still have one more year before the tax is implemented in 2028... our government has done it before. Lol

The Banks in America have been used for ML recently they were caught and reported, so HK can't be the hub for ML because of zero taxation on gains. It depends on other factors but if you are saying evading taxation is ML then that's not right because here in HK no one is evading taxation.

Like in my country, no one is because they have not implemented any taxation rule and I hope they never will but now with the increasing number of hacks, and seizures, you are right, they will make it permanent to control the flow of money but no matter how much they try they always have loopholes and weak links that hackers come to find and then exploit. Hackers will stay smart forever, I guess.

[BABY SHOES]

However, this law is for tax residents of other countries who use HK to evade crypto tax. Now the authorities in HK would share these data with overseas government, so the can tax their residents according. It is all about collaborating to combat tax evasion, under OECD CARF.

Ouch, now I understand... Before I was a little misunderstood... I'm sorry, but it would be a good collaboration of tax-evading outsiders.

Like in my country, no one is because they have not implemented any taxation rule and I hope they never will but now with the increasing number of hacks, and seizures, you are right, they will make it permanent to control the flow of money but no matter how much they try they always have loopholes and weak links that hackers come to find and then exploit. Hackers will stay smart forever, I guess.

Your country has not done crypto taxation rules? Some other countries have been strict about taxes including my country, although it can be said to be small, it's just that suspicious fund flows will still be monitored by them, even the source of funds from marked platforms can be confiscated with an unspecified time.